Posts Tagged ‘Copper Mining’

What kind of surpluses will the world experience when the copper finance trades go south on top of slowing global industrial demand? Why is this good for silver? As global base metal supply, especially copper, starts to decline, it will drastically impact global silver mine supply. Around 55% of world silver mine supply comes from copper, zinc and lead production.

Newly mined supplies of gold and silver will decline in 2016 and beyond. The main culprit is low prices. In 2015, gold and silver prices spent most of the year trading below miners’ all-in production costs. Primary silver production is already on the decline in the major producing countries. Holders of physical gold and silver would be wise to hang on tight to it & keep a long-term perspective.

There are various estimates for what the Marginal Cost of getting Copper out of the ground is before supply is taken offline completely. But it is reasonable to assume that Copper is currently being priced well below the long term Production Cost of Processing the Industrial Metal. The $2 Copper could well be setting up for an ample short covering rally before 2015 ends.

For copper the elevator down accelerated after the metal lost the $3 mark. Sagging demand in China & Europe was the final nail. But this is where your opportunity comes into play today. Something’s different this time. Copper bears are capitulating. A stealth rally is in the works. And it could net you 20% gains in no time.

A big driver for nickel is the steel market, and this has been relatively bearish. Nickel ore stockpiles in China and elsewhere are still high, but are now being drawn down toward potentially critical levels. There is a bullish argument that we could see the nickel market slip into deficit by as early as mid-2015.